Despite a crypto crash, Art’s most powerful players have decided that NFTs are not a fad and are actually very cool

This week, on reversed trends and reverse logic…

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Dear Reader,

I am writing to inform you that, like it or not, we are stuck with crypto and NFTs.

This news may surprise many of you. Even people with no interest in blockchains at all know that the overall markets for crypto and NFTs have been in the toilet for almost an entire year. Much of the blame falls on crypto-entrepreneurs themselves, an alarmingly high proportion of whom have had their chosen costumes as populist revolutionaries of next-generation finance ripped to shreds, revealing them to be nothing more than old-fashioned con artists, incompetent or incompetent. both.

No wonder regulators are closing in on the industry. US Securities and Exchange Commission recently took aim at the Kraken, a crypto exchange with no apparent history of bad behavior. The SEC ruled that the company must register its staking operation as a security offering, a complex and costly process that continues the commission’s history of making aggressive moves against crypto, even during the boom.

SEC also recently informed Paxos that it plans to sue the company over its Binance USD stablecoin, alleging that the offering (which is pegged one-to-one to the US dollar) is an unregistered security. New York’s Department of Financial Services also hit the company at the state level, barring Paxos from issuing more of the same stablecoin to consumers.

So why is this happening now? The difference in 2023 is that regulators have far more support to get tough than they did two years ago. Remember, for most of 2021, the prices of bitcoin, ether, and a variety of NFTs were almost inexorably exploding toward the moon.To paraphrase Bloombergis Matt Levine, very few people in government, finance or business wanted to be seen as hindering innovation when innovation was making people rich. Now that a string of disastrous losses has made innovation look more like a cocktail of expletives and froth, the SEC’s pool of allies has expanded dramatically, both in DC and in the electorate.

The ultimate symbol of crypto’s reversal in fortunes arrived during Super Bowl LVII last Sunday. Crypto advertising was so prevalent during the 2022 edition of the Big Game that it became known in some pop culture and business circles as the “Crypto Bowl.” Business analysis firm Kantar estimated that the total amount spent on cryptospots reached $39 million, as of New York Times. A year later, blockchain companies were completely absent from the lineup of ultra-expensive TV spots during the most-watched annual event in American television. The only crypto connection in the mix was an ad from a gaming company called Limit Break offering free NFTs.

Brian Contreras from Los Angeles Times reported this Monday that at least four crypto sites were in the works for the 2023 Super Bowl until the fraud allegations against Sam Bankman-Fried and FTX torched the reputation of the crypto world’s most trusted, most prominent avatar overnight. So, instead of soliciting celebrity endorsements from the likes of Larry David and LeBron James while beating the drum for widespread risk-taking with products too opaque for most people to understand (see: Crypto.com is now infamous “Fortune favors the brave” campaign.), the crypto industry went quiet in the new year.

This may sound very much like a eulogy for Web3. And yet, paradoxically, in both the business world and the art world, I think what we’re witnessing in the midst of this asteroid storm of bad news is crypto’s strange resilience. Sure, it looks terrible that the track’s trajectory has swung so low and so fast. But what matters more than the direction of that track is the sheer fact that tracking still feels important enough to do.

Admittedly, I acknowledge that I put my thumb on the scales here a bit as a member of the (art) media with a good deal of autonomy over this column’s focus from week to week. But surveying the art world right now reveals a serious divergence between crypto’s horrifying profile among the general public, and its surprising resilience in the establishment art world.

Since mid-January 2023, three major international art institutions have announced the addition of NFTs to their permanent collections. This Monday, the Los Angeles County Museum of Art posted that it had received a gift of 22 generative NFTs from pseudonymous crypto collector Cozomo de’ Medici, with the donation ranging from artists as crypto-native as Dmitri Cherniak to art world bona fide as Cai Guo-Qiang. The previous week, Pompidou announced that they had done so acquired 18 NFTs by 13 artists from France and elsewhere, including John Gerrard, Agnieszka Kurant and Sarah Meyohas. In January, SFMoMA added a NFT by new media pioneer Lynn Hershman Leeson to its holdings, marking the Bay Area museum’s entry into crypto collecting.

The institutions above join a small handful of others who were even earlier adopters. ICA Miami officially accepted a Cryptopunk given by Yuga Labs in November 2022. Shortly thereafter, the Buffalo AKG Art Museum purchased one issue of each of the 16 NFTs in “Peer to Peer,” an exhibition curated by Tina Rivers Ryan in collaboration with institution-focused blockchain platform Feral File.

The profit-based side is not giving up either. Here in LA, the mega-agency UTA is running full speed with a dedicated Web3 division led by a former paralegal Leslie Silverman. The group represents both digital artists, startups and blockchain-based projects. The client list currently includes NFT artist Diana Sinclair; the Yuga Labs-owned trio of CryptoPunks, Meebits and Autoglyphs; and as of January the Moonbirds producer Proof.

Back in New York, Venus Over Manhattan just opened “Beyond Digital”, an exhibition of works from the collection of Pablo Rodríguez-Fraile, the founder of the NFT platform Aorist, and Desiree Casoni. The show features NFTs alongside physical objects in multiple media– another attempt to develop the dialogue between crypto and the rest of the art world.

From my perspective is “Refik Anadol: Unsupervised,” the monumental screen-based installation that dominates MoMA’s lobby until March 5. Although I agree with my colleague Ben Davis’ skewing of the piece as both a work of art and a potential messenger about the role of technology in modern life, it would be a mistake to overlook the symbolic power of a gigantic generative artwork that takes over a central area of ​​the planet’s most revered institution of avant-garde art. What’s more, the wider universe of Without supervision contained one NFT is offered on Feral File in an edition of 5,000 for $100 each. (The edition is now sold out.)

I am in no way arguing that NFTs are living up to the full-force revolutionary rhetoric put forth during the great cryptocurrency run of 2021, or that they ever will. But I think it’s equally unlikely that the whole business will dissolve into nothing.

At this point, there is vanishingly little connection between art NFTs (generative or not) and, for example, mass fraud perpetrated by FTX, the SEC’s enforcement actions against Kraken and Paxos, or even the disappearance of crypto advertisers from the Super Bowl. Instead of becoming a twelve-lane bridge between contemporary art and mainstream adoption, legitimate NFT artworks have become the focus of a small, self-selecting group of enthusiasts who make, buy, sell, view and exhibit these works regardless of what the rest of the world thinks of them .

Which means that in a real sense they have become the same as all other types of artwork in history. Whether you see it as a triumph or a failure is a matter of perspective. But wherever you stand on NFTs in February 2023, you have the rest of your life to reconsider.

That’s all for this week. “Until next time, remember: Nothing determines what you feel now as much as what you expected before.

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